The discovery of a green glowing protein from jellyfish has netted two Americans and one Japanese scientists the Nobel prize for chemistry. Each will take an equal share of the 10m Swedish kronor (£790,000) award.

Green fluorescent protein (GFP) is one of the most important tools that biologists use for investigating how the molecular machinery in cells operates. Attaching it to other proteins or structures allows scientists to watch a cell's molecular cogs at work.

This has given important insights into what goes wrong during disease. For example, the protein - which was first observed in the jellyfish Aequorea victoria in 1962 - has been used to probe nerve cell damage in Alzheimer's disease, follow the development of cancer cells and investigate what happens during HIV infection.

The three winnners are Prof Osamu Shimomura, who first isolated GFP and discovered that it glows bright green under UV light; Prof Martin Chalfie, who demonstrated that GFP could be used as a luminous tag in cells; and Prof Roger Tsien who investigated how GFP fluoresces and modified it to produce more colours, an advance that allows scientists to follow more than one process in cells at the same time. This image of neurones from a so-called "Brainbow mouse" shows cells labelled with different coloured GFP markers.

Brain cells dyed with multicoloured versions of modified GFP

Just after the award was announced, Tsien spoke to journalists in Stockholm from California via an audio link. "GFP and its successors became so popular and powerful in the biological literature," he said. "I'm grateful that I'm included."

He singled out Prof Douglas Prasher at Woods Hole Oceanographic Institution as someone who had made a big contribution but had missed out because each Nobel can be won by a maximum of three people. Prasher was the first to realise that GFP could be used as a tracer molecule. "I'm sure the committee had a difficult decision, but I guess they have that every year," Tsien said. He received his PhD from Cambridge University in 1977.

"This is really, really fantastic and incredibly highly deserved," said Prof Daniel Davis an expert in molecular immunology at Imperial College London, who uses GFP regularly in his work. "Whenever a Nobel prize is announced there are always many deserving people who have played into the story. Everyone is standing on each others shoulders."

"[GFP] allows us to visualise how cells work, how proteins interact with each other. It really is a key technology that allows us to address a central gap in pretty much all of cell biology," he said. The human genome project and advances in biochemistry have told scientists what the elements that make up the human body are, but GFP has helped them to work out what they do, he said.

"We know what the bits are but to understand what makes a cell move, divide or do anything, you've got to understand how all these components interact with each other."

He said the discovery was a powerful example of how curiosity-driven science can be turned into an important application. "That is a fascinating narrative," Davis said. The work began with fundamental research on jellyfish in the 1950s and early 1960s. "But then nothing much happened. It didn't take off until the gene for that protein was identified. And then it was shown that you could attach the gene onto the gene that encodes any other protein that you are interested in."

GFP has since had some controversial uses. The world's first genetically modified monkey ANDi had the GFP gene inserted into his genome at the egg stage, and scientists have also created pigs and chickens modified with the protein. It is even possible to buy green-glowing fish from pet stores which have been genetically modified with GFP.

After a first degree at Harvard, Tsien studied at Churchill College, Cambridge, and obtained his PhD from the department of physiology in 1977. "Roger decided that it was important to know the concentration of calcium in cells, and he had a entirely novel idea about how to measure it," said Professor Jeremy Sanders, speaking of Tsien's work before his research on GFP.

"His idea was to design a molecule that could get into cells and change colour when it contacted calcium ions. It was a brilliant conception, combining chemistry and biology. He made the compound in [the chemistry department], then he went back to [the physiology department] and proved his idea worked. Roger's original compound, and its descendants, have transformed our understanding of cell biology. He has continued his work in this area, and is an inspiration to everyone who reads his work or hears him speak."

After completing his PhD he was the Comyns Berkeley Unofficial Fellow at Gonville and Caius College from 1977 to 1981, before moving back to the US.

The Nobel prizes for literature, peace and economics will be awarded tomorrow, Friday and Monday respectively.